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"We've been in a very tight range. Housing starts were a little stronger than expected, but they didn't really change the overall trend. The focus is on the U.S. government shutdown and how it relates to Fed policy and growth outlook."
- Bank of Nova Scotia (based on Bloomberg)
Pair's Outlook
Pair seems to be gaining pace as it extended it's gains after bouncing of the 1.031. At the moment it is testing weekly R2. As it should not cause any major disturbances by itself, we can see that during the sell off in September there was some action around 1.04. It might be that these effects will be felt now as well therefore we would remain cautious. In case the pair losses this bullishness the 20 and 200-day SMAs should stop its depreciation.
Traders' Sentiment
It seems that bulls are heavily trenched in as at the moment they account for 74% of market participants. That is 3% more than yesterday. In addition to this, 64%, which is 8% more than yesterday, of pending orders are set in the favour of the bulls as well.
© Dukascopy Bank SA